Company History and Profile

The vision of Drummond Gold Limited (Drummond or the Company) is to become a significant gold and base metals producer. To achieve this, the Company is pursuing a strategy of growth through exploration, acquisition and early production in the Drummond Basin in Queensland.

Origins in the Drummond Basin – a good address

Drummond Gold Limited (Drummond or the Company) has its origins in 2004 when its founders began to evaluate several properties in the well-known Drummond Basin mineral province of Central Queensland.

This process resulted in the formation of Mt Coolon Gold Mines Pty Ltd (MCGM) in 2006 and the acquisition of the Mt Coolon tenements and associated historical geological and production information in relation to the tenements. When Drummond was incorporated in April 2007, MCGM became a wholly owned subsidiary.

The Company was listed on the Australian Securities Exchange in December 2007 (ASX: DGO).

Today, Drummond brings together former significant gold mines and other gold and base metals prospects in the well-known Drummond Basin mineral province of Central Queensland.

The wholly owned Mt Coolon (Koala) and Glen Eva mines and the Yandan mine (in which Drummond can earn a 51% interest) produced more than 600,000 oz of gold over several decades.

Gold mining began at Mt Coolon in 1914. Profits from early gold production there were used to form Western Mining Corporation in 1933 as it embarked on its initial Kalgoorlie ventures.

Selective acquisition and a vigorous exploration program in the two years prior to listing and a $7 million IPO capital raising ensured that Drummond hit the ground running as a fully operational exploration company with a significant, established gold Resource.

In 2008, Drummond entered into an agreement with Straits Resources Limited to earn a majority interest in the Yandan gold project, allowing Drummond to significantly increase its gold Resources. In 2009, Drummond launched an exploration drilling program, targeting the discovery of a high grade feeder system beneath the East Hill pit.

Drummond has also prepared a conceptual processing plan, for which a scoping study has been completed, under which several mines to be developed in the Mt Coolon region would supply ore to a central treatment plant.

Drummond has a prime mineral exploration address in the Drummond Basin which hosts Pajingo and other epithermal gold deposits. With the Mt Coolon gold field at its centre, it provides fertile ground for Drummond’s modern exploration.

Drummond’s assets currently comprise:

  • Wholly owned exploration tenements totalling 808 km2 in and around Mt Coolon including mining leases at the former Mt Coolon (Koala) and Glen Eva mines
  • Applications for a further 1892 km2 of exploration tenements
  • Current Measured, Indicated and Inferred Resources totalling 283,000 oz gold at Eugenia, Mt Coolon (Koala) and Glen Eva
  • Availability of established infrastructure servicing the nearby Bowen Basin coal province which ensures that the Mt Coolon region, located directly inland from the major coastal city of Mackay, is well served
  • Other high potential prospects Badlands (wide drill intercepts of gold mineralisation plus silver-lead-zinc), TPM (copper-gold mineralisation), and Conway (high grade gold intervals)

Plus

  • Yandan Gold Project where Drummond is earning a 51% interest by spending $3 million over three years
    • former mine that produced 365,000 oz gold
    • currently has an Inferred Resource of 308,000 oz gold (4.1 Mt @ 2.4 g/t)
    • 45km west of Mt Coolon, linked by an all weather haul road, with water, power, accessible location, well equipped exploration camp
Drummond Gold tenements
Drummond Gold tenements

Current Gold Resources

In the Drummond Basin, Drummond has established mineral Resources that were increased by 33% during 2007 as a result of the exploration successfully undertaken by the Company prior to ASX listing. The Resources are located at three deposits – Eugenia (revised in 2009), Mt Coolon (Koala) and Glen Eva.


DRUMMOND BASIN GOLD RESOURCES 30 SEPTEMBER 2009

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The data in this report that relates to Exploration Results, the accuracy and quality of data forming the basis of all resource estimates, and the interpretation of mineralisation at Eugenia, Koala and Glen Eva, are based on information compiled by Mr Erik Norum who is a Member of The Australasian Institute of Geoscientists and who has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the “JORC Code”). Mr Norum is a full-time employee of Drummond Gold Ltd and he consents to the inclusion in the report of the Mineral Resource in the form and context in which they appear.

The data in this report that relates to Mineral Resources for the Eugenia, Glen Eva and Koala Deposit is based on information evaluated by Mr Simon Tear who is a Member of The Australasian Institute of Mining and Metallurgy (MAusIMM) and who has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the “JORC Code”). Mr Tear is a full-time employee of Hellman & Schofield Pty Ltd and he consents to the inclusion in the report of the Mineral Resource in the form and context in which they appear.

YANDAN GOLD RESOURCES 30 SEPTEMBER 2009

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The information in this report that relates to Mineral Resources is based on information supplied by Peter Storey, who is a member of the Australian Institute of Mining and Metallurgy. Mr Storey is a full time employee of Straits Resources Limited and has sufficient experience relevant to the style of mineralisation, type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Mineral Resources and Ore Reserves”. Mr Storey consents to the inclusion in the report of the matters based on their information in the form and context in which it appears.